by Jean-Pierre AUDOUX -  FIF Delegate General

France has embarked on a railway-infrastructure investment programme unprecedented in the post-war period.

Our country, through three separate initiatives, namely : the Grenelle Green Summit, the National Transport Infrastructure Master Plan (SNIT) and the Network Rehabilitation Plan, has clearly decided to prioritise the rail mode.

The projects incorporated into the SNIT plan, ranging from tramway networks, high-speed lines to metros and regional express systems, represent an investment effort aggregating over € 85 billion over a 20-30 year period. Furthermore Central Government, conscious of the need to save our rail network from further deterioration, has also opted to inject € 13 billion over six years to fund the rehabilitation programme, which means that investment volumes have virtually trebled compared with the € 700 million spent in 2004.

The Grenelle Green Summit will have contributed to the emergence of such decisions by clearly prioritising, for the first time ever, investments focused on sustainable development and specially those concerned with transport infrastructure. The desired modal rebalancing (with road transport remaining by far the predominant transport mode in all events) is underpinned by an unequivocal political and socio-cultural  multi-partite consensus  which forms the background to deliberate public policy measures in favour of alternative transport modes.

While in principle the political battle would seem as good as won, the other yet-unanswered challenge is how this ambitious programme should be funded, but as things now stand, several questions still call for a proper  response on this specific point.

Firstly, complete funding packages for  priority HSL  projects  have proved or are still proving difficult to secure, a typical case in point being the Tours-Bordeaux HSL project (overall cost: € 7.8 billion) which , though  initially franchised-out, have nevertheless forced RFF - whose cumulated debt today stands at € 30 billion – into making  an unbudgeted contribution of some € 1.7 billion!

As regards the Le Mans – Rennes  HSL project (overall cost :  € 3.4 billion), for which a PPP-type solution should normally be adopted but where a candidate has yet to be chosen, it would be premature to assert that the public contribution to be requested by the future PPP will be sufficient to finalise the funding package for the project (€ ??? billion).

The scale of the efforts required must be measured against those already deployed for the other two HSL projects, namely the Eastern HSL Phase II and the Eastern spur of the Rhine-Rhone HSL.

The first of these two latter projects mobilised contributions in excess of € 2 billion, including 38% funded by the Regions and local authorities.

As for the eastern spur of the Rhine-Rhone HSL now under construction, we should remember that it has already imposed a massive financial effort on the local authorities concerned.

The bottomline is that RFF now finds itself obliged to invest some € 2 billion annually in HSL projects up until 2014 ,  in other words to multiply its present contribution of some € 900 million by two in over just four years.

Concurrently with this unprecedented development effort, an equally massive conventional-network rehabilitation programme is also in progress.

As early as 2006, the Government followed-up the findings of the audit conducted by Professor Rivier (Lausanne Railway Polytechnic ) in 2005 by deploying a rehabilitation plan focused on stopping the rail network from deteriorating further.

In 2004, the length of rehabilitated track had reduced to a mere 450 km or just 1.5% of the total network size, which inevitably leads to the gradual closure of 70% of this network by 2020. In other words, the trend will only be reversed at the expense of a massive rehabilitation effort.

Efforts deployed have indeed proved useful but they clearly have not been massive enough in scale to reverse the process. The backlog has consequently accumulated, which means that the obsolescence spiral will only be reversed if some 1000 km of track are rehabilitated annually over a ten-year period, starting now.

This would translate into an annual investment of € 2 – 2.2 billion , which is thrice the amount spent in 2005.

The stark reality is that although RFF is investing € 1.6 billion to rehabilitate 800 km of track, even this effort is intrinsically inadequate, so perhaps suggesting that the problem is to do with how the industrial tool is calibrated.

In actual fact the predominant issue is the budgetary dimension of the project. More specifically, whereas the national network - and the high-speed lines in particular -  rate from adequate to excellent in quality, the core part of the conventional network (inter-regional, regional lines, etc.) keeps deteriorating at an alarming pace year after year through lack of the corresponding funds.

Given this parlous state of affairs, it certainly is no exaggeration to say that an extra € 400 to 600 million would actually be needed to implement a quality rehabilitation programme.

An incremental conventional-network rehabilitation effort is absolutely necessary if the development of Regional Express Train (TER) services is to be sustained.

The Regions for some ten years now have been pressurised into funding railway investments as never before. Not only have they pledged - as part of the 1997 pilot scheme and subsequently by virtue of the 2002 SUI law - to fund 100% of the cost of new trains or TER stations, but they have also mobilised to source much of the cost of railway investment projects. Yet they are now also being asked to fund an increasing share of network rehabilitation costs!

This raises issues of a conflictual political nature, in that speed reductions have never been so widespread across the entire conventional rail network as now, added to which the financial and budgetary circumstances of most Regions are fast deteriorating (abolition of the business tax….).

The situation for a number of regional elected representatives is made even more critical by their calculated decision to use the regional express train (TER) concept as an instrument of policy and as a shop-window for their Region. Yet an increasing number among them are having to question the pertinence of pursuing an ambitious TER train investment policy given that results are no longer in line with expectations.

From the industrial standpoint, this issue is all the more crucial as it impacts – through two mega orders (REGIO2N, REGIOLIS) – on prospects for the procurement of up to 1860 trainsets. Next, unless the order goes ahead, the workload of  French manufacturers  might well start slackening as from 2011  and decline sharply as from 2016-2017.

In the circumstances, it will readily be understood that the network rehabilitation issue actually affects the French railway sector as a whole.

Now, unless fresh budgetary resources are conjured from somewhere to fund French railway investments – a prospect which remains highly improbable in the current climate – it follows that drastic choices must rapidly be made as between our ambitious HSL projects and our network rehabilitation priorities.

Consequently, there could be no denying either the reality of the situation nor for that matter the complexity of an economic and social environment anything but conducive to major productivity gains, at least in the short run.

The absence of any comfortable room for manœuvre means that policy makers will very rapidly be required to decide on short-term and medium-term political railway priorities at the very time when the government is about to submit to Parliament – even if this is non-voting issue – the draft National Transport Infrastructure Master Plan, and when the Rail Sector Strategic Committee is being set up. Hence the need not only for some serious thinking but also for a public determination in this regard. To rehabilitate or to extend the national rail network : that is the question, but it would unfortunately seem that the dilemma in the short and medium term is simply unavoidable…